USEUROPEAFRICAASIA 中文双语Français
World
Home / World / Americas

Study: Mainland brands outpacing foreign rivals

By PAUL WELITZKIN in New York | chinadaily.com.cn | Updated: 2016-11-14 10:08

Consumers in China are favoring local brands over foreign competitors, especially for personal-care products from mainland companies that are responding faster to shoppers' needs and desires,according to a recent study.

Consulting group Bain & Co's Dealing with Two-Speed China said that while sales by foreign brands declined 1.4 percent in 2015, sales by local companies increased 7.8 percent in some fast-moving consumer-goods categories such as personal care products.

"Local and foreign brands are advancing at different speeds in China," said the report. "Local brands gained share over foreign brands in 16 categories and across all city tiers, making their biggest wins in Tier-1 cities. Foreign brands gained share in only seven categories, and three categories had no change in share."

Chinese companies are making their biggest advances in skin care, baby diapers, hair conditioners, toothpaste and shampoo, the report said. Foreign companies did manage to make some gains, most notably in fabric softener, infant formula, instant noodles and beer.

"In many cases, multinationals are gaining ground either through heavy marketing investments or as the result of food-safety concerns with local products," the report said.

Local brands are doing well because they have a single-country-focused development process for new products and can quickly respond to Chinese consumers, the report said.

"For example, Shanghai Jahwa consistently uses its knowledge of Chinese herbal beauty therapy to win over consumers, staying ahead by frequently launching new SKUs (products)," according to the report.

It said that Chinese companies also can make and execute decisions faster than their foreign counterparts and this enables them to adapt quickly to new trends with innovative products. It gives as an example Seeyoung, a local shampoo that emerged in 2014, expanded its business last year by swiftly bringing silicone-free products to market, leaving foreign brands tofollow its lead.

Local companies are also increasing marketing investments through traditional media and digital orsocial media, and mainland companies also have embraced e-commerce faster than their foreign rivals, said Bain.

"They diligently use omnichannel retailing to increase coverage. Seeyoung strengthened its presence in Tmall, JD.com and other e-commerce platforms, participating heavily in online promotions, while simultaneously building out its offline exposure," noted the report.

Three Squirrels started four years ago as a pure online brand in the snack category,targeting the young generation with creative and fun cartoon-based advertising. The report said it reached sales of 2.5 billion yuan ($367.2 million) in 2015, with the goal of becoming the top snack brand in China.

Most Viewed in 24 Hours
BACK TO THE TOP
Copyright 1995 - . All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily Information Co (CDIC). Without written authorization from CDIC, such content shall not be republished or used in any form. Note: Browsers with 1024*768 or higher resolution are suggested for this site.
License for publishing multimedia online 0108263

Registration Number: 130349
FOLLOW US